Credit Card Cash Withdrawals

By
Lisa Bigelow
Updated March 28, 2017

Is a cash withdrawal in your future?

Credit card cash withdrawals allow consumers to utilize a credit line when a transaction must be completed with cash. Transactions are completed at an ATM or with "convenience" checks. When used with discipline, cash withdrawals can be effective. However, exercise caution, since fees and interest charges skyrocket quickly, and the terms of cash withdrawals frequently differ from the terms of a regular transaction.

How to Get a Credit Card Cash Withdrawal

Days after you received your credit card, you received a notice in the mail with a pre-selected, 4-digit PIN code for use in cash withdrawals. You also may have received pre-printed convenience checks that you can deposit in a bank account or use at a store, just like a regular check. Either method qualifies as a cash withdrawal, and may be subject to high fees and interest charges. In exchange, you have flexibility in the event that you need cash instead of a credit card.

How Much Cash You Can Access

How much cash do I need?

Check your credit card statement for your cash withdrawal limit and interest rate terms. Frequently, the "cash advance" is not the full amount of your credit line. Even if you have available credit, if your cash advance line is "maxed out," you will not be able to get cash using the card at an ATM, or with a convenience check. Cash advances are not available on store cards -- they only come with cards like Visa, MasterCard, American Express or Discover.

Cash Withdrawal Fees and Interest

Fees and interest rates are high and skyrocket quickly. Fees for a cash advance, including convenience checks, run from a minimum of $10 to 3 percent of the total transaction, whichever is higher. Interest is usually charged from the moment a transaction occurs, instead of after a grace period, like normal transactions. Interest rates are considerably higher and usually run over 20%. In addition, remember that ATMs usually charge their own fees.

Tips for Maximizing Cash Advances

Credit card companies frequently offer cash withdrawal deals, which can be used effectively, provided consumers understand the terms. Don't take out more than you need, and know the fees, interest rates and how you'll pay if off in advance. Using a free ATM and paying it off quickly also limits your fee and interest expense. Consumers should also consider alternatives to cash advances, such as returning recently purchased items, selling unused possessions on eBay or to a pawn shop, or taking a loan.